By Mathew Carr
October 13-17, 2023 — The past four years has undermined one of the basic assumptions I made in my reporting on business the previous three decades.
Armed with a degree in journalism (with submajors in economics and politics), I entered the field with the idealistic notion that markets are cool and reporting on them paid better than other forms of reporting.
I had a successful career for 30 years, speaking to business people about supply and demand, market pricing, advertising, supply chains and about what might happen next.
My various editors seemed to love it. One of them eventually agreed to support my transfer from Australia to the UK.
A couple of decades later, my belief in the fundamental power of competitive markets to solve global problems is almost completely shattered.
If they want, politicians can change the market structure so that damage, such as that caused by heat-trapping greenhouse gas, is squeezed out of the global economy. Only politicians can do this.
They could do it, for instance, by making polluters pay for the emissions they vent into the atmosphere. Europe and other places are already choosing this market tweak but such policy only covers about one fifth of emissions and, even when they are there, the payments are generally way too low.
Repeatedly making the wrong choices
Even though market structure is a choice, most world leaders can’t seem to stop making the wrong choice.
More than 30 years after they said they wanted to prevent climate change under the UN Framework Convention on Climate Change, most politicians across the world seem instead hell-bent on avoiding those market structures.
The theory in my head, as I reported on natural gas, carbon permits and electricity markets for Bloomberg LP until 2020, was that the 2015 Paris climate deal effectively set a global budget for carbon — a level above which the world would miss its target to keep temperatures below 1.5c above levels in 1850-1900. Those 50 years are basically a period with OK data on climate that predate the industrial revolution and the mass-burning of coal, oil and natural gas.
In theory, having a limit on something means it becomes scarce. It becomes valuable. The scarcity was meant to create a giant market where countries would set market rules so the remaining budget (now about a decade at current levels, sigh) is divided among people of the world, somehow in a fair fashion.
That task of setting new market rules that would discourage emissions of heat-trapping gas and make them fall quickly has proved impossible so far for the thousands of leaders that want it to be so.
Instead, a weird standoff between big countries has delayed rational lawmaking. Nearly everyone has apparently embarked on “operation last gasp” for fossil fuels, seeking to exploit the vacuum before leaders finally agree on how to tighten emissions.
What’s clear, to me at least, is that the biggest supporter of free markets — America — has turned into the biggest exploiter of unfair markets.
At one point about a year before Bloomberg fired me, a former senior US government official sat in the open-plan kitchen area of Bloomberg’s fancy new European headquarters and tried to convince me that the climate problem would be solved by the private sector. A change in the market structure wasn’t really that necessary, was his inference.
I failed to see his point, then. Yet still this mantra pervades the mainstream media and comes out of the mouths of the supposedly wise.
Huge corporations have “science-based targets” to reduce their emissions to net zero by 2050 and have agreed to “2030 sustainable development goals”.
Whoopee! We’ve saved! Not.
Only way the save the climate – change the market structure
The only thing that will save us from climate change is a pivot in the global-market structure.
One of the world’s biggest investors is now, somewhat surprisingly, making that point too.
I pressed the finance ministry of the Norwegian government on whether it would change the mandate it gives to the nation’s sovereign wealth fund (the world’s largest) so that it would automatically invest more in cleantech, rather than in dirty fossil fuels. At the moment, its investments match the structure of the global economy (mostly dirty). In other words, it invests in almost every big listed company, including oil producers, as set out in this interesting “Cleaning Up” podcast.
What Norway says is fairly unequivocal. The private sector does not set policy. Politicians do.
State Secretary in the Ministry of Finance Ellen Reitan (Labour Party), Norway (I added emphasis), in response to my questions about whether the fund’s mandate will be adjusted to save the climate:
“Good long-term returns are dependent on sustainable development in economic, environmental and social terms. The Fund’s objective is the highest possible return, given an acceptable level of risk. While the Fund is not a climate policy tool, it has a responsible investment aim for companies in the investment portfolio to make their activities compatible with global net zero emission, in accordance with the Paris Agreement. The fund has an interest in companies decarbonising and managing the risks posed by climate change. There are no plans to change the mandate.”
Photo: Reitan, Norway govt website
This means politicians have to step up, as they should have done the past 30 years. Anyone who thinks companies will voluntarily give up money to save the climate is delusional.
The dire state of the voluntary carbon market completely backs up Reitan’s point.
$1.71 per ton
The low price shows that politicians have to make the market mandatory.
It’s clear the current market structure does not demonstrate the scarcity of emission reductions. Even if a more biting UN or G20 climate deal is struck, countries will probably be able to choose not to participate. If they make that choice they will probably face additional trade barriers, so even a mandatory market will be voluntary to some extent. A climate settlement will only happen if it includes justice between those who caused the climate crisis and those suffering it – that’s why the new market rules are so difficult to strike.
“From a true sustainability perspective, some companies (many companies?) will need to do some serious navel gazing to see if what is being produced by them is good for the planet and non human lifeforms, or not. This may be the greatest test of commercial moral compasses in the years ahead. Change, or, be changed. The (voluntary) choice is yours but the range of choices will reduce over time,” said Richard Broome, an ESG entrepreneur.
Now though, the pressure on political leaders for a climate settlement is building and building quickly — because companies have not done it by themselves.
In the first three quarters of the 2023, global temperatures are already 1.4C above pre-industrial times, according to Copernicus, which tracks climate data.
The shocking thing about this fact is how temperatures have risen so fast this year. Based on the jump of about 0.3C in one year (this year), we could be pushing the 2C limit in two short further years. That is, by 2025. I’m simply extrapolating this year’s approximate shift on the back of an envelope. I don’t care if you think I’m fearmongering. I certainly hope this does not play out.
How did this awful situation for the 8 billion people on earth (and rapidly declining wildlife) happen?
Greedy, exploitative market structure.
I only started reading the fascinating “The Nutmeg’s Curse” recently, where author Amitav Ghosh speaks to the rapacious nature of colonialism and how “the spice that was originally found in the Banda Islands of Indonesia … has since travelled far and wide at the hands of trade and commerce to be present in kitchens across the world.”
The spreading of this spice is a example of how markets can enrich the lives of everyone on earth, if people have enough financial power to afford a little nutmeg to give their daily dessert some extra zing. Markets CAN work.
As far as climate change is concerned, one of Ghosh’s most compelling ideas in his book is that America has used the pretence of support for free markets to abuse its global power: “A weakening of the petrodollar regime would mean the loss of an irreplaceable American strategic and financial asset,” he said.
Ghosh cites William R. Clark who said the petrodollar regime is “in many respects more important than US military superiority.”
That regime, and the prominence of warmongering, is now under some pressure. The weakening is happening as countries replace the dollar.
Two things are coming to the fore. Firstly, the regime is based on a rigged market and people are more aware of that as OPEC struggles to keep prices high. They are only high because supply in the market is kept artificially low.
OPEC+ may deploy the bad market but the US of A is the best at exploiting it.
US reaction to the Paris climate deal to limit emissions:
Secondly, the 96% of the people on earth who don’t happen to live in the US are getting a bit sick of America’s bad behaviour — and its selfish unwillingness to give up the status quo market structure.
America, or course, is not alone when it comes to bad behaviour. Russia invaded Ukraine in part to protect its own fossil-fuel interests, namely natural gas supply to Europe. (The US is currently eating Russia’s lunch.)
Militarism (warmongering) and permacrisis Trumps fair markets, it seems (capital T intended). Taxpayers can be ignored, apparently, because government is for the corporations, apparently.
And I had a front-row seat as this nonsense played out during the past few decades.
The UK judiciary is still not properly deadling with my unfair dismissal litigation, by the way — either accidently or on purpose. I sued Bloomberg for unfair dismissal and for breaking whistleblowing laws. I’ve not had much luck because the judiciary is also for the corporations, apparently.
Dealing with Norway’s finance ministry and reading Ghosh’s book made me remember how I was treated within Bloomberg during the world’s biggest initial public offering.
In early 2016, a few weeks after the Paris deal was struck, Saudi Crown Prince Mohammed bin Salman bin Abdulaziz Al-Saud started announcing plans to list 5% of Saudi Aramco at a valuation of approximately $2 trillion in what became that largest initial public offering (IPO). Aramco in April 2019 made its debut international bond sale, which raised $12 billion (Wikipedia) and in December of that year it did eventually pull off the wider deal, raising about $29 billion (Reuters) by selling shares in its giant oil group.
That deal would not have happened had the world chosen a more sustainable market structure.
Global oil protection service
I’ll come back to Aramco, but even before 2016, I had non-deliberately became a thorn in Bloomberg’s side, rather than an asset, according to some in the firm. I thought I was helping the company navigate the climate transition. Instead I was seen as a threat.
I contend that Bloomberg insiders in London, and likely the leaders in New York as well, decided that I had to go, partly to protect the Aramco deal.
What I didn’t give enough weight to in the early part of this century was that Bloomberg LP was a crucial part of the global oil-protection service outlined in Ghosh’s book — the information and propaganda arm.
In the five years to 2015, I pushed Bloomberg to boost coverage of the UN climate talks in a bid to focus on the failings of what was the deeply unsustainable market structure.
I wanted to cover the talks in Paris in late 2015. I was blocked by Bloomberg leadership. I still broke news of the deal, with colleagues, because I had spent months building rapport with Brazilian envoys.
Middling Bloomberg? Turns out it was part of the predatory delay
This is what I said when evaluating my own performance in 2015. Note how I assumed the Paris agreement would make a difference. It really has disappointed so far in the ensuing 8 years amid operation last gasp and Bloomberg’s global oil protection racket:
Instead of praise, in early 2016, I was placed on a performance improvement plan as Aramco started announcing its intention to raise the billions it did. That deal was extraordinarily lucrative for Bloomberg’s main customers, by the way: giant banks (though they got less than they hoped for).
It’s the profit motive that markets need to adjust and or curb if they are going to succeed in pivoting the world to achieve sustainable development. That’s always been the case and still is. People can rail #gowokegobroke all they want. That will only be true until market rules change.
On 20 May 2016 I wrote to Lucy Mills of Bloomberg’s HR department as part of the performance-plan process.
I expressly raised concerns that Bloomberg’s content was too focused on fossil fuels and there was a need to focus output more on the need for climate protection.
The essence of my concern was that, as a respected provider of news to both large companies and policymakers, Bloomberg’s failure to provide sufficient and balanced coverage of climate protection vs fossil fuels was contributing to damage to the environment.
It was effectively concealing the scope of that environmental damage and the failure of nations and emitters to comply with their legal obligations under the just-agreed Paris Agreement (weak though those obligations are). Markets were not working.
Leader or delayer?
In early January 2017 I spoke briefly with John Micklethwait, Global Editor-in-Chief of Bloomberg News, doorstepping him after he’d appeared on TV on the floor below me in the Bloomberg office.
I told him I was concerned about the way we were covering climate protection. Micklethwait requested that I email him, setting out those concerns.
I did so on Jan. 18, 2017. I said we should put warnings on fossil-fuel-expansion stories like the warnings currently on cigarette packets in some countries.
I was concerned that if Bloomberg did not cover climate change and the carbon budget in greater detail, given Bloomberg’s immense reach and gravitas as a news source within the business, investment and policymaking communities, there was a greater chance that talks would fail to give Paris the teeth it badly needs, leading to increased damage to the environment.
Damage piles up
And indeed, that damage has piled up the past six years.
As Micklethwait said I should, I tried to convince others in leadership positions, including Heather Harris and Stuart Wallace, who were senior leaders in the newsroom and Will Kennedy, Lars Paulsson and Andy Reierson, who were leaders and/or editors in our energy team.
I contend Bloomberg did not improve its climate coverage, and indeed, scaled it back, disbanding a daily story wrap on carbon prices around the world, for instance.
On Nov. 14, 2018, I sent five stories from the Financial Times and the Grist to senior editor John Fraher, showing how those publications were doing better on climate coverage than Bloomberg LP. I unsuccessfully tried to get this email included as a “protected whistleblowing disclosure” in the subsequent unfair dismissal litigation.
Brazil’s take on talks coverage
The following month, I sent to Will Kennedy a letter setting out some of Brazil’s concerns about the coverage of the 2018 climate talks, which were recently complete. It included this: “Accurate representation of all countries’ positions is vital if the world is to make the necessary progress – through constructive discussions at COPs. Brazil of course has been a leader not just in global discussions on climate change, but also through its actual actions. We are already meeting our pre-2020 targets in 2018, and look forward to all parties who made pre-2020 commitments to deliver on those targets as Brazil has done, despite economic challenges, to further strengthen the foundation of climate action going forward.”
The UK judiciary also failed to accept this as a whistleblowing disclosure and refused to interrogate the bad market structure.
I wrote the following to the senior manager Kennedy on Jan. 7, 2019:
Did you see the FT did a big hitup on climate over the holidays…earning this praise from former US envoy:
Strongly commend @FinancialTimes 12-27 editorial on climate change — one of best ever. Key point: shining spotlight on “self-deception of those who accept reality of problem but only pretend to solve it.” Time to stop pretending.
The world is still pretending almost five years later.
Bloomberg seems to like losing on climate-action stories
Later the same month I sent another email to senior executive editor Fraher, pointing out stories that Bloomberg was being beaten to by other publications, in particular the Financial Times.
One story highlighted included this: “Right-thinking people who understand the climate science here and are in positions of power and influence are now beginning to think: ‘How does the financial ecosystem benefit or not from climate risk?’” says Steve Waygood, the chief responsible investment officer at Aviva Investors, the £350bn asset management arm of the British insurer. “While there are short-term gains to be made, the longer-term environmental disaster spells an economic disaster.”
That disaster is now closer than ever. I tried to add this email as a further protected disclosure in my litigation. I was blocked by Bloomberg and the judiciary.
Bloomberg was being warned that it wasn’t doing enough to limit the damage and it was being given specific information on how it can do better, I contended. The news/propaganda outfit was not publishing stories that were similar to these stories. That’s concealment by omission.
The intergenerational miscarriage of justice I alluded to underpins that the protected disclosures did indeed include information about wrongdoing that Bloomberg should have recognised as legitimate whistleblowing.
I didn’t need to show that Bloomberg was breaking any law. All I had to do is show was that it was damaging the environment. The UK judiciary didn’t appear to acknowledge this part of the law, at all.
That idea of climate injustice across generations was successfully used by claimants in a decision in the German Constitutional Court published April 2021. The court said “one generation should not be allowed to consume large parts of the CO2 budget under comparatively mild reduction burdens, if this would at the same time leave a radical reduction burden to the following generations and expose their lives to comprehensive losses of freedom.” Should the environmental disaster spell economic disaster (see 17.3), future generations would have less freedom. See this.
On February 5, 2019, I wrote to senior editor Kennedy, quoting an investor, which said this: The fossil-fuel industry could “completely screw itself up” by fighting for market share with each other once oil demand starts to fall. Investors may favor fossil fuel companies prepared to buy back shares instead of competing fiercely against renewables. Oil demand was to peak within two decades, “upending oil markets in a dramatic way.”
I contended Kennedy was threatened by this development in the oil market and then, without giving enough weight to the environmental damage that was already occurring and will occur in the future, decided along with others to force me out of the “limited partnership” to make it easier to continue to focus on getting lots of fossil fuel-related money based on the flawed market structure.
By the end of that month, I was on a “headcount roadmap” list.
Senior editor in the London newsroom Fraher said: “Overall, I need to come down by 15 and this list gets me pretty close (though I will still need to post for a couple more positions in the next month or two.)
On the document provided for the litigation, my (typo fixed) name appears below others, which are redacted. The documents are not really clear about what specifically was going on with people on the list, it has to be said. That is because most bad stuff about firings probably isn’t put in writing in large corporations — a deliberate bid to erode accountability and defend unfair-dismissal court cases, I contend.
It would still take Bloomberg another 15 months to fire me.
(To be continued. End of this story tweaked slightly to allow a better transition to part two; earlier, added quotes and headlines, updated the main headline)